WATER SUPPLY - PROVINCE OF LIMBURG II

This is part of the 2023-2027 investment programme on water supply infrastructure of Waterleiding Maatschappij Limburg (WML), a water supply company operating in the province of Limburg, in the Netherlands. The programme consists mainly of replacement and upgrading of drinking water production and distribution facilities.

The project consists of a a 5-year (2023-2027) investment programme that aims at upgrading drinking water supply and distribution networks in the service area of the promoter. It mainly concerns the replacement and upgrading of water production infrastructure, transmission mains and distribution network.

The project concerns the 2023-2027 investment programme in the production and distribution facilities of WML, one of the 10 drinking water supply companies in the Netherlands. The programme consists mainly of renewal and extension of water treatment facilities and distribution networks and it will be to the benefit of over 1.1m inhabitants in the service area of the company. The project aims to maintain supply security in the context of climate change and maintain service quality at current high standards. The promoter is known from a previous project and has very good capacity. In particular, the investments will enable the promoter to increase water efficiency over the overall supply system and to better cope with more frequent and prolonged drought periods, a foreseen climate change impact within the service area. The project will contribute to mitigating market failures in the water supply sector by financing infrastructure, which generates positive environmental, public health and climate externalities that are not fully reflected in the applicable water tariffs in the Netherlands.

Dutch water companies in the Netherlands are currently facing significant challenges, WML like its peer companies will need to invest substantially in the coming years in order to replace aging infrastructure and to respond to climate changes. The new financing provided by the Bank will help the Company to finance this transition in a context of energy crisis. This is will be the second operation with WML, the presence of the Bank is expected to give a strong signal of the relevance of the project and crowd in other lenders. In addition to a moderate financial advantage, the financing will provide longer maturity than market standards and more flexibility on the drawdowns which is line with the long implementation of horizon of the project and the economic life of the assets financed.

The investment is geared toward securing a sustainable management of water supply and distribution, bringing about positive environmental impacts. The upgrading of the water distribution mains, production infrastructure and other network and process optimisation measures are examples of components with environmental/resource efficiency impacts. The promoter also has the intention to enhance water supply infrastructure resilience and address adaptation to climate change through this project. Compliance with the EU Water Framework Directive (2000/60/EC), Drinking Water Directive (98/83/EC), and EU and national environmental legislation will be verified during appraisal.

The Bank will require the promoter to ensure that contracts for the implementation of the project will be/have been tendered in accordance with the relevant applicable EU procurement legislation (Directive 2014/25/EU or 2004/17/EC, where applicable, as well as Directive 92/13/EEC) as interpreted by the Court of Justice of the EU, with publication of tender notices in the Official Journal of the EU (OJEU), as and where required.